Are you looking to receive funding for your R&D endeavours in Greater Vancouver? If so, do read on!
What does SR&ED mean? Scientific Research & Experimental Development (SR&ED) is a federal tax credit initiative, conceptualized by the Canada Revenue Agency, having been in effect since the 1980s. The primary aim of this initiative is to incentivize R&D endeavours in Canada so as to improve upon an existing product, principle, process, material and methodology.
If candidates fulfill the SR&ED eligibility criteria in Vancouver and get approved for the tax incentive, they stand to recover as much as 70% of permitted expenses in refundable and non-refundable tax credits.
Planning to apply for this incentive? You don’t have to do it alone! Because of the strict eligibility parameters, detailed technical reports and relevant paperwork involved, SRED consultants in Vancouver use their expertise of the system to help businesses prepare their applications to maximize the chances of an approval.
As of March 2019, the federal budget has proposed to get rid of the taxable income test that was previously a mandatory provision of the SR&ED program. This basically means that companies can acquire SRED credits at a higher rate of 35% on the initial 3 million dollars of eligible expenses.
If you’re planning to apply for this incentive, there has never been a better time to get started! Below, we’ve summarized the process for you.
Who is eligible for the SRED incentive? Your project must display some measure of:
When reviewing your application, the CRA goes through a checklist to gauge eligibility;
- Does the project involve work such as engineering, design, data aggregation, testing or development?
- Does the project involve the design or development of new software?
- Has the project modified a process so as to reduce expenses and enhance manufacturing capabilities?
- Does the project involve the creation of a new product, enhancements to a product in existence or the creation of a prototype?
- Has the project encountered unresolved technical issues that have caused an increase in costs?
If the answer is “yes” to one or more of the above, there’s a good chance that you are eligible to apply for the SRED tax credit.
Key Documents in Your Application
When it comes to qualifying for SR&ED tax credits, it’s important to make sure that all your documents are in order and completely error-free.
Aside from the basic documents, you also have to provide detailed reports that show that your SR&ED project actually aligns with the experiments undertaken. The criteria state that these experiments should have been conducted at the same time as the project for which the SR&ED incentive has been claimed.
Additionally, you will also have to prove how every single expense claimed has contributed to further the project. The most common documents for this include files, emails, memos, books, etc.
The CRA is also interested in reviewing the documents that detail the lifespan of the project and the time taken at each phase. So, for instance, you will have to furnish them with contractor timesheets as tax credits are claimed based on the documented time.
Are You Conducting Research and Development Projects in Vancouver?
Don’t go unfunded!
Innotek provides qualified and experienced SR&ED consulting services in Vancouver. Our team carries a wealth of experience – 12 years and counting – in engineering, IT, chemical research practices and more!
We can help you prepare an airtight SRED application to ace that CRA review. Our team will make sure that your documents align with the CRA’s stringent criteria.